arm's length


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arm's length

adj. the description of an agreement made by two parties freely and independently of each other, and without some special relationship, such as being a relative, having another deal on the side or one party having complete control of the other. It becomes important to determine if an agreement was freely entered into to show that the price, requirements, and other conditions were fair and real. Example: if a man sells property to his son the value set may not be the true value since it may not have been an "arm's length" transaction. (See: contract)

References in periodicals archive ?
The new lens is said to meet 75% of the wearers' visual needs within arm's length.
Employees who are closely related to their employers are usually not dealing at arm's length.
Moreover, intra-firm exports are a complement to arm's length affiliate sales and hence likely to respond in the same way to cultural distance as such sales.
In international tax law, the arm's length principle states that multinational enterprises should carry out controlled transactions at arm's length prices, or prices which associated enterprises would have agreed to if they had made a comparable transaction on the open market rather than the controlled transaction that was in fact made in order that taxation may be levied in relation to the hypothetical "normal" transaction.
The court rejected the IRS's contention that the regulations effectively supplanted the role of independent comparisons by defining arm's length as including "all costs.
Separate Entity Accounting and the Arm's Length Standard with
The councils have always been told they serve at arm's length from the county.
Generally, transactions between related parties are not considered to be at arm's length.
government was the first to enforce the arm's length standard as the overarching principle in setting transfer prices when, in 1994, the IRS issued final regulations accompanying section 482 of the Internal Revenue Code requiring that related party transactions meet the standard.
In either case, the purchaser may not be controlled by any officers, shareholders, or employees of the seller and the sale must be at arm's length.
The first is an agreement with respect to the Gradaus Property with an arm's length party.
As an alternative grounds for its decision, the Tax Court examined whether the agreement was comparable to similar arrangements entered into at arm's length under the Sec.